Germany wants the European Union (EU) to introduce stricter trade measures against Chinese car manufacturers. Among other things, the country is calling for tariffs on imported plug-in hybrids. German Finance Minister Lars Klingbeil points to the increasing competitive pressure on European car manufacturers.
Klingbeil made his appeal during a visit to Volkswagen’s headquarters in Wolfsburg, where he spoke with representatives of the works council. The German Vice-Chancellor wants the EU to take tougher action against trade practices that disadvantage European industries, reports Reuters. In doing so, he is calling not only for tariffs on Chinese plug-in hybrids, but also for stricter European rules on local production and the proportion of locally produced parts in vehicles.
Import duties on Chinese EVs
Incidentally, the EU had already introduced import tariffs on Chinese-made EVs in 2024. Plug-in hybrids are not currently covered by these measures. The definitive tariffs were introduced at the end of October 2024 for a period of five years. The tariffs vary by manufacturer and range from 7.8 to 35.3 per cent. They are in addition to the standard EU import duty of 10 per cent.
These previously introduced tariffs apply specifically to fully electric cars and not to plug-in hybrids. The European Commission is, however, exploring alternatives to the existing duties, including agreements on minimum import prices. For example, in February 2026, an exemption was granted to the Volkswagen Anhui joint venture between Volkswagen and JAC Group. As a result, the Cupra Tavascan is exempt from the additional duty under certain conditions.
If the European Commission heeds Germany’s call, this will mean in practice that European trade protection measures will be extended to plug-in hybrids, to which import tariffs do not currently apply.
Volkswagen in trouble
The debate over import tariffs on Chinese-made PHEVs is taking place whilst Volkswagen is undergoing a major reorganisation. Earlier this month, the German car manufacturer agreed on extensive cost-cutting measures and staff reductions. Four of Volkswagen’s factories could also be closed at the start of the next decade, unless alternative solutions are found.
The impact on employment at Volkswagen is significant. Under the current transformation plan, up to 50,000 additional jobs will be cut in the long term. It is reported that around half of the announced job cuts will affect Germany.
High production costs, overcapacity and competition
Volkswagen is grappling with a combination of high production costs, overcapacity and increasing competition in the European car market. The transition to electric mobility in particular is putting the group under pressure, whilst Chinese manufacturers are gaining ground with competitive models and prices. As a result, the necessary investments in electrification and new technology go hand in hand with the need to cut costs. Through this reorganisation, Volkswagen aims to make its German operations structurally more competitive.
During the talks in Wolfsburg, representatives from Volkswagen were joined by members of the works councils of subsidiary brands Audi and Porsche. The Minister-President of Lower Saxony also took part in the discussions. The state is a major shareholder in Volkswagen.
